A good year for agriculture, a bad year for farmers

Despite a deficient monsoon, 2014 was a year of record agricultural production. But the buoyancy in production failed to translate into a higher income for farmers. It was a year of disappointment for farmers.

During the agricultural year 2013-24, which ended in June 2014, farmers produced a record harvest of 264.4 million tonnes of foodgrains. Not only in foodgrains, quantum jumps were also witnessed in the production of oilseeds, maize , cotton and pulses. Production of oilseeds reached a record high of 34.5 million tonnes, a jump of 4.8 per cent. Maize production increased by 8.52 per cent to reach a level of 24.2 million tones. Pulses production reached an all-time high of 19.6 million tonnes, an increase of 7.10 per cent over the previous year. Cotton production too touched a record high.

In Kharif 2014 too, despite the shortfall in monsoon rains, farmers produced a bumper crop of rice, maize and cotton.

With such record production, and that too at a time when monsoon had acted as a damper, the nation remains indebted to the virile and hardworking farmers. Despite being at the bottom of the pyramid, Indian farmers have not failed the nation. Probably knowing this, Prime Minister Narendra Modi had, ahead of the Lok Sabha elections, promised to provide more income in the hands of farmers by implementing the Swaminathan Committee report. BJP had time and again reiterated its promise of ensuring farmers a 50 per cent profit over the cost of production.

But in reality, farmers were given a paltry increase of Rs 50 per quintal in the minimum support price (MSP) for paddy and wheat, which translates into an increase of 3.6 per cent, not even enough to offset the additional burden from the prevailing inflation rate at that point of time. On top of it, basmati rice and cotton witnessed a crash in its prices. While basmati rice production had doubled in Punjab and Haryana, an alarming dip in prices was observed. Disappointed farmers sold basmati at prices ranging between Rs 1600-2400 per quintal, against a price of Rs 3,261 to Rs 6,085 they got last year.

In cotton too, prices slumped from an average of Rs 4,400 to Rs 5,200 per quintal last year to around Rs 3,000 this year, prompting the government to direct the Cotton Corporation of India to step in to buy at the procurement price of Rs 3,750 per quintal. Let us not forget that the jump in basmati and cotton production happened as farmers had incurred an additional cost on diesel to run tube wells for irrigation. Punjab and Haryana had recorded a 50 per cent shortfall in monsoon. 

As if this was not enough, Ministry of Food had issued a directive asking State Governments not to provide any bonus over the MSP. In case, the State Governments continue to provide bonus, the Ministry will withdraw from procurement operations. State Governments have also been advised to reduce procurement in view of the excessive stocks in storage. In other words, farmers are being increasingly left to face the vagaries of the markets.  

With the Food Corporation of India (FCI) being made to gradually withdraw from procurement operations, Chhatisgrah, Madhya Pradesh and Punjab are witnessing a deliberate delay in procurement operations. Chhatisgrah, which had promised to buy ever grain of rice produced by farmers, had limited rice procurement to a maximum of 10 quintals per farmers. After protests, it agreed to buy 15 quintals per farmer. In Punjab, an inordinate delay in making spot payments to farmers is being seen as a subtle message to farmers not to produce more rice.

Coming at a time when farming is already faced with declining incomes and rising indebtedness, the failure to prop-up agriculture will only add to the exodus from the farm. With land acquisition made easier, and also extending it to multiple cropped areas, agriculture has become a sacrificial goat in the road to economic growth. All talk of economic reforms has so far remained confined to the industry. Agriculture does not figure at all on the economic radar screen of the country. The implications it will have on the country’s food security in the years to come are being simply glossed over.   

The continuing apathy is clearly visible from the significantly low budgetary provisions for agriculture year after year. In 2013, agriculture received 19,307-crore from the annual budget kitty (exceeding Rs 16 lakh-crore), which is less than 1 per cent of the total budget outlay. This year, Finance Minister Arun Jaitley provided only Rs 22,652-crore to agriculture and cooperation departments. 

Source: 2014 -- A good year for agriculture, a bad year for farmers. ABPLive.in 
http://www.abplive.in/incoming/2014/12/31/article465644.ece/2014-A-good-year-for-agriculture-a-bad-year-for-farmers

Farmer suicides: More than what IB can see

While a young farmer in prosperous Gujarat allegedly set himself on fire last week demanding a higher support price for cotton triggering a series of farmers’ protests across the State, the Intelligence Bureau (IB) has submitted a report to the Prime Minister Office (PMO) on the failure to seriously address the problem of rising number of farmer suicides.

According to the National Crime Records Bureau (NCRB) 11,772 farmers had reportedly committed suicide in 2013. In the past 17 years, close to 300,000 farmers have committed suicide.

The IB report states that farmer suicides are showing an increasing trend in Maharashtra, Telengana, Karnataka and Punjab. It is fast spreading in Gujarat, Uttar Pradesh and Tamil Nadu where farmer suicides is emerging a recent trend. While Vidharbha in Maharashtra is widely known as the suicide hot spot, the serial death dance is taking the lives of two farmers on an average every day even in the frontline agricultural State of Punjab.

Although the IB has blamed suicides on natural as well as man-made factors like pricing policies and inadequate marketing facilities among the various causes, I don’t understand the reason why IB should be getting into areas where it’s expertise is almost zero. Setting a bad precedent, the IB had earlier come out with a report accusing some non-governmental organizations (NGOs) and activists for holding up the country’s development process. It had even gone to the extent of computing the loss in terms of country’s GDP.

Let me make it clear. The IB has no expertise to measure GDP. Nor has the IB got scientific acumen and ability to understand the implications of genetically-modified crops on human health and environment or for that matter on whether or not nuclear plants are safe that it can be asked to deliver a verdict. Similarly, the IB suggestions on what needs to be done to put an end to the shameful scourge of farmer suicides show that the entire exercise is politically motivated. Otherwise there is no justification for IB to ignore its primary role of providing timely intelligence about subversive activities. Let’s not forget the IB had come in for sharp criticism for serious lapses in intelligence that led to the 2008 Mumbai terror attacks.

What the IB has said in its report on farmer suicides is nothing new. All the suggestions it has come up with have been simply collated from various committee reports, academic studies and newspaper articles. Farmer suicides is one of the most analysed subject with truckloads of academic research papers, and has led to least 20 separate central and state-level committees to the affected regions. Some popular films in Hindi and regional languages like Marathi, Telgu and Malyalam have also been made on the subject of farmer suicides.

Where the fault lies is the failure to come out with a comprehensive solution. Short-term measures like compensation to the next of the kin of the deceased, loan-waivers and relief packages, including some efforts to provide psychiatric advice to farmers, have miserably failed to stem the tide. Policymakers have refused to go beyond these ‘short-term’ measures. While numerous relief packages, including the Rs 1,100-crore package declared by Gujarat as late as on Dec 15 and Maharashtra’s demand for Rs 4,500-crore from the Centre for drought-affected farmers have been forthcoming, no sincere effort has been made to radically overhaul the intensive farming system that has led to the crisis.

Mounting debt and the inability to source bank credit is part of the problem, but it is not the primary reason for farmer suicides. It is also true that increasing foray into the cultivation of cash crops like cotton and sugarcane, and inadequate marketing facilities are among the numerous reasons, but farmer suicides is a very complex and intricately woven phenomenon that requires a much deeper understanding. It’s time to look beyond growing indebtedness, and trace the reasons that lead to the mounting burden of debt that forces farmers to succumb under pressure.

But what perhaps is being simply glossed over is the declining trend in farm incomes over the past few decades. Agriculture is no longer an economically viable activity, and several studies have shown that farm incomes have remain frozen (or declined) in the past 20 years. Even globally, studies by UNCTAD show that farm incomes have remained static for two decades if you adjust for inflation. In other words, what the farmer was getting as wheat price in 1995 is no different from what he is getting in 2014. The only difference being that while farmers in rich developed countries get direct income support and subsidies, farmers in India are left to survive on hope.

Farmers need a monthly assured income package, and not more credit. Unless, a serious attempt is made to provide more income in the hands of the farming community, I see little possibility of the serial death dance abating. 

Source: ABPLive.in Dec 24, 2014

http://www.abplive.in/india/2014/12/24/article461373.ece/Farmer-suicides-More-than-what-IB-can-see

Why "Grow in India" too is important ...

For three years in a row, wheat farmers have received a paltry increase of Rs 50 per quintal per year in the form of minimum support price (MSP), which translates to 50 paise per kg every year. This corresponds to an insignificant 3.6 per cent increase in the price being paid to wheat farmers.

Compare it with the 7 per cent additional installment of Dearness Allowance (DA) to Central government employees in September over the existing rate of 100 per cent of the basic pay/pension to compensate for price rise, you realize the step-motherly treatment being meted to the majority farming population in the unorganized sector. Employees are getting 107 per cent DA allowance today.

In addition, as per a Centre government notification, whenever the DA crosses 50 per cent, there will be an automatic increase by 25 per cent in allowance such as Children Education Allowance, Travelling Allowance, Conveyance Allowance, Cash Handling Allowance, Risk Allowance, Bad Climate Allowance, Hill Area Allowance, Remote Locality Allowance and Tribal Area Allowance, among others. Agreed, not all employees get all these allowances but they do get some of these. In other words, the Central and State government employees are completely insured against any and all kinds of price rise.

The private sector employees too get a guaranteed income which incorporates all these allowances plus they receive hefty bonuses and shares.

But when was the last time you heard of a Children Education Allowance, a Bad Climate Allowance or a leave travel allowance or for that matter any of the above mentioned allowances being given to farmers? They are expected to meet all their expenses, including children education, daughter’s marriage, bad weather etc from the MSP they get. And the MSP is being kept nearly frozen for all practical purposes by successive governments to keep food prices in check. In other words, the entire burden of rising prices is being very conveniently passed onto to the farmers. The farmers must live in poverty and hunger to keep the middle class happy. 

No wonder, several studies show that more than 58 per cent of the 600 million farmers sleep empty stomach. Ironically, the people who produce food for the country themselves go hungry.

Several times in the past, Parliament has been informed that the average monthly income of a farming family (comprising 5 people plus) in the country stands at a paltry Rs 2,115. This includes about Rs 900 per month from non-farm activities like MNREGA. In many States, including the frontline agricultural States of Punjab and Haryana, the minimum wages for workers are higher than the daily farm income. Interestingly, while the Central Government Employees Federation is demanding a minimum monthly wage of Rs 15,000 for contract workers/other unorganized sector employees; and a minimum monthly salary of Rs 26,000 to the lowest aid employees of the Central Government, there is no talk at all of providing an enhanced minimum monthly package to the farmers.

In other words, it is the country farming population – comprising 600 million people -- that forms the neo-untouchable class.

An interesting analysis has been provided by the former Punjab Chief Minister Capt Amarinder Singh. When it comes to farmers, there is hardly a difference between the UPA and NDA. Accordingly, while the average cumulative increase in the paddy and wheat MSP during the Congress-led UPA, between 2004 and2014, was Rs 70 per year. During the previous NDA regime 1998-2004, it was only Rs 11. What he says is a stark pointer to the continuous apathy and neglect of the farming sector under successive governments.

As of this is not enough, there is more worrisome news that awaits farmers. Ministry of Food has already directed State Governments to refrain from providing any additional bonus over the MSP announced the Centre. Madhya Pradesh, Chhatisgarh and Rajasthan governments, which provided a bonus of Rs 100-200 per quintal for the past few years, have been warned not to do so in future. In case they don’t stop the practice, the Centre will not undertake food procurement operations in those States.

What is however not being told is that the MSP benefits only 30 per cent of the farmers. Even in the case of wheat and rice, where the Food Corporation of India makes procurement from the mandis at the support price, the network of mandis is only available in 30 per cent farmers. In the remaining 70 per cent of the cultivable areas, there are no mandis as a result of which farmers have to resort to distress sale year after year. Farmers in Punjab and Haryana are in the privilege category considering the he network of mandisand procurement centres as a result of which they at least get the assured price for their produce.

Even in western Uttar Pradesh, the lack of mandis and procurement centres forces farmers to transport wheat and paddy to the nearest mandis across the border in Haryana. Like the previous Congress regime, the new BJP government in Haryana has also banned the entry of paddy flowing in from Uttar Pradesh. The plight of the UP farmers who now face the prospects of distress can well be ascertained.

Let us not forget that while MSP is announced for some 24 crops, in effect it benefits only wheat and rice farmers for it is only in these two crops that procurement is made every year. In a case filed in the Punjab and Haryana High Court, Gurnam Singh of Bhartiya Kisan Union (Haryana) has petitioned how lack of procurement hits farmers. Last year, while the MSP for sunflower was fixed at Rs 3,700 per quintal, but it was purchased for Rs 2,600-2,900 per quintal. It was added that while 48,000 quintals of sunflower arrived at the Shahbad mandi for sale, and considering the average loss of Rs 500 per quintal, it resulted in Rs 4 crores loss to farmers.

The same holds true for all crops, including sugarcane for which the State governments fix a fair price. The industry has been demanding market prices for sugarcane, which means lower prices in effect, to sustain the industry. Similarly, a strong lobby of economists is demanding the withdrawal of procurement operations in wheat and rice which effectively means doing away with MSP. The argument is that it is because of MSP that the government is forced to buy and stock huge quantities of food grains. These economists are telling that the farmers would benefit if the markets are allowed to make purchases. But what is not being told is that already 70 per cent of India’s farmers are dependent on private markets, and it is in these areas that bulk of the farm suicides take place. 

Withdrawing the MSP would only force farmers to abandon agriculture in big numbers and migrate to the cities looking for menial jobs. Modi government therefore must take a realistic view of agriculture sector and makes efforts to bring prosperity in the countryside. Grow in India is no less important than Make in India. #

Source: 

Why "Grow in India" too is important... Deccan Herald, Nov 11, 2014.

http://www.deccanherald.com/content/440805/why-quotgrow-indiaquot-too-important.html

As in the West, Indian farmers too need direct income support

Chatting with Ashok Kumar from One World South Asia, Policy Analyst Devinder Sharma explained how flawed policies goad Indian farmers to suicide.

Action Aid organised a national consultation in New Delhi and public hearing on the issue of framers' suicides. The farmers’ consultation brought together experts and policy analysts to evaluate the progress of government initiatives to respond to the ongoing agrarian crisis.

Chatting with Ashok Kumar from One World South Asia, Policy Analyst Devinder Sharma explained how flawed policies goad Indian farmers to suicide.  Excerpts from the interview: 

OneWorld South Asia: What do you have to say on the status of Indian farmers in the country?
 
Devinder Sharma: India is witnessing the worst agrarian crisis all across the globe. It is a crisis because in the last 15 years more than 2, 95,000 farmers have committed suicides.  But these are the farmers who had the ‘courage’ to die. But there are others who are also living in the same state but they do not have the courage to die. It certainly does not mean that the latter are doing well.

OWSA: What do you think is the root cause of such a condition of the farmers?

Sharma: Over the years, the policies have been so designed that agriculture has become unviable and uneconomical in India. The problem is because of the economic policy followed over the years which is pitted against the farmers. So, the effort is to move people out of agriculture to the urban areas. Unfortunately, the mainline economists think that if you want to have economic growth, the way we measure our GDP, then it can be done by following those countries which have reduced their population engaged in agriculture. So, the entire thinking is unless we remove these people out of agriculture there will not be economic growth in this country.

OWSA: Where do you think have we gone wrong, precisely?

Sharma: The basic thrust is to make farming unviable and the force the farmers out to urban areas, which is a very flawed policy in pursuit of economic growth and is actually a path to disaster. What has happened in Europe or America cannot be followed in India. In a country which has 60 per cent of its population involved in agriculture the kind of paradigms which worked in the West cannot be implemented here.

OWSA: How could we resolve this situation which seems to be going out of hand?

Sharma: Mahatama Gandhi had said that a country like India needs production by the masses and not for the masses. Farming has to be made viable.  According to Gandhi, we should strive for economic growth by making farming profitable. Time has come when the government should set up a separate farmers’ income commission which decides the per-family or per acre family of the farmers with the help of several other inputs like the variety of soil, water availability and other factors. It is shocking to learn that a farmer earns around Rs 2000 to Rs 3000 in a month while the monthly salary of a lowest government employee is Rs 15,000. Government should strive to do away with this gap and ensure that the minimum income of a farmer at least matches that of the lowest government employee. We need to provide an assured minimum income of Rs 15,000 per month to the farmer. And, then we can see a shift taking place to sustainable agriculture.

OWSA: How farming in this country can be made viable?

Sharma: We have tried many formulae to improve the viability of farming. We are also trying to implement Foreign Direct Investment (FDI) in retail which has earlier not worked in Europe or America. But, I think we should go for sustainable farming. We have to bring in our country, what has been done in the West.  Farming in these countries is viable because farmers are provided with direct income support.  India also follows the same agricultural model (Application of fertilizers and machines) followed in the West with the difference being only of scale (of land holdings). Therefore, we also need to provide the same kind of support to farmers provided in those countries. Our farmers our dying because we do not give them direct income support.

Source: One World South Asia, Nov 30, 2012
URL: http://southasia.oneworld.net/peoplespeak/like-west-indian-farmers-need-to-be-given-direct-income-support-expert#.ULjgoCLYHMx